Service Recovery And Empowerment
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Service Recovery And Empowerment

Service Recovery And Empowerment

Everyone screws up. The problem is what you do to keep the customer from defecting. Often, "I am sorry" will work. If you have a monopoly "I am sorry" is fine. Most of us have competition and the cost of losing a customer is huge. Very few people know the cost of a defection so if you have a bank, retail store, gym, hair salon, or any other business, what is the real cost of losing a customer?

In my book, Achieving Excellence Through Customer Service, I talk about the defection strategy. In my book Loyal for Life, I teach how to master Service Recovery.  Firms like Federal Express do not know how to spell the words Service Recovery. They are in essence a monopoly. I get a 60% discount off their international rates so I am stuck with them. This week I have been in Hilton Head Island, South Carolina. My wife Pat and I got married here 45 years ago so we came back. In many places customer service is great. At several places it is awful and we would never go back. I just went to Trip Advisor and left my comments. These comments and my rating will be there for years. The problem is the employee doesn't care and management believes that there are millions of new potential customers.

Most employees and owners figure a customer will never come back. They are wrong. Superior customer service creates word-of-mouth advertising. It is free and 100 times less expensive than paid advertising and capital renovation.   

When you make a mistake or screw up you have to solve the problem in 60 seconds if you want to keep the customer. Keep in mind most employees don't care and think the owner is rich. Most owners have no Service Recovery system in place. Almost all employees fall back on rules, policies, and procedures. The hell with the customer.

How do you save a customer? More importantly, how do you flip an upset customer so that in 60 seconds they believe they are dealing with the greatest company on earth. To make this work, every employee must be empowered and master this skill.

1. Act Quickly. All this has to happen in 60 seconds or less. No time to move this up the chain of command. What the employee does is magic.

2. Take Responsibility. It's OK to say we screwed up, it's our fault, or we messed up. The chances of customers hearing these words will be close to a miracle but they work magic. Don't lie or pass the problem off to someone else or try to move it up the chain of command.  All this has to happen in 60 seconds or less for the magic to work.

3. Be Empowered. Make a decision in favor of the customer on the spot. When I ask an employee if they can make an empowered decision they often say "what do you mean?" or "would I be fired?"

4. Compensate. Every organization has products and services of high value and low cost. Give the customer something of value where they say “Wow. Cool. Great. Thanks.” Being too cheap does not work. The greatest fear of management is that an employee will give away too much. Think what would happen if thousands of your customers were over happy. If the restaurant can't seat a party of four at 7:00pm for 30 to 40 minutes, invite the guests into the bar area to have drinks on the house until they can be seated.  Your real cost for 2 drinks per person is $8. Another 100 to 1,000 people will hear about this because of Facebook, Twitter, Instagram etc. All for $8.

The more generous the Service Recovery the more of an impact. The cheaper you are the smaller the impact. Your goal should be:

  1. Get the customer to come back
  2. Make them feel like you really care
  3. Have them tell their friends

If the service was so bad, many will never return regardless of the offer. You are hoping this bad customer experience was a one-off occurrence and rarely happens. You are buying yourself a second chance to impress the customer.

In the U.S., less than 2 percent of companies practice Service Recovery. At least 80% of employees lie when there is a problem and hope the customer will just disappear. I suggest each organization come up with a list of at least 10 products and services your employees can give away free and on the spot when they or someone else makes a mistake.

John Tschohl is the founder and president of the Service Quality Institute. He is considered one of the world’s foremost authorities on all aspects of customer service. John’s monthly strategic newsletter is available online at no charge at www.customer-service.com.

Published: April 19th, 2022

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